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Readers may discern a disconnect between the prevailing economic mood and the relentless innovation of online superstore Amazon. Even as whole segments of the economy crumble, Amazon is spearheading a whole new consumer electronics category with the Kindle, and as if that wasn’t audacious enough following it by releasing a bigger, more expensive version.Now Amazon is embarking on another bold effort. It’s entering the publishing business with a program called AmazonEncore, a program that leverages all of the myriad data Amazon can collect to find overlooked books with potential mass appeal, which it will then rerelease under the AmazonEncore imprint. The first AmazonEncore title, to be released in late August, is Legacy, a fantasy novel originally self published by 16-year-old writer Cayla Kluver. AmazonEncore is an intriguing idea that will no doubt send self-published authors’ hearts racing. It’s also worth noting that these books won’t be Amazon exclusives. Amazon is going head to head with traditional publishers with plans to make AmazonEncore books available in “national and independent bookstores via third-party wholesalers.”While it seems like Amazon is getting may from its core competencies with forays into consumer electronics and publishing, the online retail giant isn’t insane. Amazon is actually designed to do well in recessions, and with traditional book retailers and publishers facing challenges, Amazon is seizing the opportunity to grow its market share and enter new markets and businesses. BusinessWeek recently pointed out this dynamic: “Amazon continues to benefit disproportionately from the general shift to online commerce and the careful shopping behavior that consumers are exhibiting during the downturn. The breadth of the products it offers through independent merchants and its own expansion into new categories, along with low-priced shipping in the U.S. and abroad, continues to woo shoppers.”Amazon’s willingness to innovate and invest in book-focused initiatives during this downturn will leave it with a very big footprint in the industry when the economy begins to recover.

The book tech beat is busy lately, with big developments on both the dedicated device side and the device agnostic side. (For more about the two ebook paths, check out our post on ebook evolution.)In recent weeks, its been Amazon making all the noise. Today the company unveiled a new Kindle, the larger Kindle DX. The DX is 77% bigger and 36% more expensive, and everyone is falling all over themselves to explain why it won’t save newspapers.Of course the Kindle alone won’t save newspapers – the problems there run deep – but it might be a passable way to read the paper (if you’re the kind of person who spends $489 on a newfangled newspaper reading device). The new larger screen, 9.7 inches on the diagonal, certainly helps, as does the “auto-rotating” screen, which lets you flip from portrait to landscape. The bigger display and other features like the ability to “clip and save” articles are all designed for what Amazon is calling an “Enhanced Newspaper Reading Experience.” It also occurs to me that the Kindle demographic might align with what’s left of the newspaper demographic in a way that will offer a small ray of sunshine during these otherwise dark times. But it’s also true, as Patrick noted at his Vroman’s blog today, that the iPhone is a quite capable for reading the news (as are most other smartphones; that’s the whole point of a smartphone).What’s much more interesting than the newspaper angle – and somewhat frightening in fact – is that Jeff Bezos today announced that among books that are available for the Kindle, 35% of the copies Amazon sells are Kindle editions. This is a surprising number (at the Kindle 2 unveiling in February it was 10%) and is further proof of the huge land grab that Amazon is now enacting. Only slightly mitigating those sales figures is news that the DX will support the commonplace PDF format, leaving the door open for a future in which most ebooks sold can be read on any reader, no matter what company manufactures it.Amazon has also been making waves on the device agnostic side of things with last month’s purchase of Stanza, the popular free ebook application for the iPhone. Amazon had already unveiled a Kindle app for the iPhone, and this move further solidifies its presence there (and presumably in the app-centric ecosystems of future smartphones). The Kindle itself, of course, is the main focus. The longer that Amazon can keep its hands on the ebook market (a market that will eventually embrace open formats, one has to assume), the longer Amazon can rake in its monopoly profits. The iPhone moves, as well as the decision to support PDFs on the DX, meanwhile, are a smart hedge and a tacit acknowledgment that ebooks will one day be predominantly sold in formats that aren’t tied to any one device.Update: The Kindle is really not going to save any newspapers: “the best deal Amazon will give the Dallas Morning News – and we’ve negotiated this up to the last two weeks – they want 70 percent of the subscriptions revenue. I get 30 percent, they get 70 percent. On top of that they have said we get the right to republish your intellectual property to any portable device. Now is that a business model that is going to work for newspapers? I get 30 percent and they get the right to license my content to any portable device – not just ones made by Amazon? That, to me, is not a model.”